A decentralized Autonomous Organization is a community-led entity with no central authority and is governed entirely by its individual members who collectively make decisions about the future of the project. Once these rules are written onto the blockchain, the next step is around funding.
The DAO needs to figure out how to receive funding and how to bestow governance.The rules of the DAO are established by a core team through the use of smart contracts. Let’s discuss some of the types of DAOs with its functions below:
Types of DAO
- Protocol DAOs
- Grant DAOs
- Philanthropy DAOs
- Collector DAOs
- Investment DAOs
Among various DAOs, Protocol DAOs are the familiar and popular DAOs. The Conspicuous provision about these DAOs is that they are developed to have the control on governance of the decentralized protocols, keenly the lending/ borrowing, Dapps and decentralized exchanges.
Highlighted factors of these DAOs can be remarkably listed (i.e.They have smart contracts). Some of the examples of protocol DAOs are Maker DAO, Uniswap DAO and Yearn finance.
The center of attention of these types of DAOs are they help in supporting social responsibility initiatives. They get activated towards the point of bringing enhancements in the web3.0 landscape.
The Big Green DAO is the first non-profit led philanthropic DAO. They are a US-based 501c3 non-profit that believes growing food changes lives with nutrition improvement. The DAO they are launching is an experiment in democratizing and decentralizing grantmaking.
Imagine and conclude collector DAOs as NFT DAOs.These DAOs mainstream on collecting funds ensuring the community will have the ownership of blue-chip NFT arts and other collectibles.
Flemingo DAO is the example which collected incredibly expensive NFTs from digital artists Cryptopunk in 2021 for $800k USD.
When searching for the prominent applications of DAOs, we can probably get the answer as to the fundraising efficiency to the whole organization.
This leads to higher investment options. Example of one such Investment DAOs is MetaCartel Venture, which is one of the DAOs focussing on investing in Dapps for profits at higher level without any hassles.
Grant DAOs are commonly uttered as the philanthropic extension of larger Defi projects.Aave and uniswap grants are the example of grant DAOs, which acts as the community pool for the funding process.
With several use-cases in real-life, DAOs are being adopted by many institutional firms and organizations to mitigate the operational cost. The main advantage is transparency and security as they are smart contract enabled, the level of security is at the maximum extent.
As early adopters in DAO creation, Hivelance is shaping itself as the best DAO development company with a wealth of blockchain developers who can help your project developed at any case. No matter if it's an existing DAO or new one.